Infra News - Published on Fri, 14 Dec 2018

DNA reported that the Sajjan Jindal-run JSW Group is planning to divest a quarter of the promoter holdings in its cement business through a public issue of around INR 4,500 crore by 2020. JSW Cement is on an aggressive expansion plan to take annual installed capacity to 20 million tonne by 2020 from the present 12.8 mt, which will reach 14 mt by March 2019.

Mr Nilesh Narwekar, the chief executive, said that “JSW Cement is targeting Rs 18,000 crore enterprise valuation by the time of the proposed initial public offering (IPO) through which the promoters plan to dilute 25% of their holding.” He said the proceeds from share sale will be used to retire part of the debt as well as fund capacity expansion beyond 20 mt. He also said the IPO plan is hinged to the company ramping up its production capacity.

Mr Narwekar said that “Once we reach the target capacity of 20 mt, we will later aspire to go for the IPO with a view to unlocking the real value of the business,” adding currently the promoters own the entire stake in JSW Cement.

He said that “The improving economic growth scenario, continued thrust on boosting infrastructure and pent-up demand will primarily be the drivers for cement consumption going forward. As part of our strategy to capitalise on these opportunities, we are planning to increase our overall capacity to 20 mt by 2020.”

He added that the company is open to inorganic growth route to ramp up capacity and that the ongoing NPA resolution process has opened up lots of opportunities to acquire cement assets and that they are proactively exploring such opportunities.